Use the Following Information to Answer the Question(s)below

question 35

Multiple Choice

Use the following information to answer the question(s) below. The risk-free rate of interest is 3% and the market risk premium is 5%.
-The cost of capital for the oil refining division is closest to:

• A)6.5%.
• B)7.0%.
• C)8.5%.
• D)10.0%.

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Definitions:

Blood Pressure

The force exerted by circulating blood upon the walls of blood vessels, typically measured in the arteries.

Ulnar Artery

A major artery of the forearm that supplies blood to the flexor muscles of the hand and medial aspect of the forearm.

Right Ventricular Systole

The phase of the cardiac cycle during which the right ventricle of the heart contracts and pumps deoxygenated blood into the pulmonary arteries leading to the lungs.

Pulmonary Trunk

The major blood vessel that carries blood from the right ventricle of the heart to the lungs for oxygenation.